Category Archives: Non-Competition Covenants

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New Massachusetts Law Limits Non-Competes

On August 10, 2018, Massachusetts Governor Baker signed into law a bill regulating non-competes, limiting their enforceability and codifying express requirements they must meet. The law goes into effect on October 1, 2018, and Massachusetts now joins the likes of states such as Utah and Idaho who have also recently passed laws regulating employee non-compete … Continue Reading

Utah and Idaho Limit Non-Competes and Vermont and Pennsylvania Work to Ban Them

Several states have recently enacted modifications to their respective non-compete laws or have legislation in the pipeline. Most continue the trend of limiting enforceability of non-competes, which are agreements between an employee and employer where the employee agrees not to enter into competition with the employer following the employee’s termination of employment. In this two-part … Continue Reading

UPDATE: The Federal Defend Trade Secrets Act vs. The California Uniform Trade Secrets Act

We first wrote on this topic nearly a year ago[1]. Since then, courts have had an opportunity to interpret some of the provisions of the federal Defend Trade Secrets Act (DTSA). Indeed, since it was signed into law, more than 360 DTSA claims have been filed, with more than 343 complaints filed in federal court. … Continue Reading

New Jersey Proposes to Drastically Restrict the Use of Non-Compete Agreements

Last month, the New Jersey State Senate introduced Senate Bill 3518 (the “Bill”), which, if passed, will severely restrict the use and enforceability of employee non-compete agreements in the state of New Jersey. Most significantly, the Bill would: (1) prohibit entering or enforcing non-compete agreements with certain groups of employees; (2) require employers to pay … Continue Reading

Lessons Learned: Tips on How to Allege and Argue Trade Secret Misappropriation at a Preliminary Injunction Hearing

Since its passage in 2016, the Defend Trade Secrets Act (DTSA) has increasingly become a valuable tool for employers seeking to enjoin former employees and competitors from misappropriating trade secrets. However, in requests for preliminary injunctive relief, companies often struggle with adequately alleging a likelihood of success on the merits of their claims under both … Continue Reading

Illinois Limits Non-Compete Agreements Yet Again

On August 19, 2016, Governor Bruce Rauner officially signed into law the Illinois Freedom to Work Act (the “Act”), with an effective date of January 1, 2017.  The Act, while short and to the point, will have a significant impact on private sector employers who routinely require all employees, regardless of job level or wage, … Continue Reading

The Defend Trade Secrets Act – Coming to a Federal Court Near You

The Defend Trade Secrets Act (the “DTSA”), the first of its kind at the federal level, has been passed in both the Senate and the House of Representatives.  Now, the DTSA merely awaits President Obama’s expected signature to become law.  The DTSA has the potential to transform trade secret litigation and create more uniform case … Continue Reading

Pennsylvania Appellate Court Finds Uniform Written Obligations Act Inapplicable to Covenants Not to Compete

In a case of first impression, the Pennsylvania Superior Court (one of Pennsylvania’s two state appellate courts) recently issued a ruling in Socko v. Mid-Atlantic Systems of CPA, Inc. (“Socko”), 1223 MDA 2013 (May 13, 2014), clarifying that compliance with Pennsylvania’s Uniform Written Obligations Act (“UWOA”) cannot cure a deficiency in the adequacy of the … Continue Reading

Federal Jury Finds Executive Recruiter Guilty Stealing Trade Secrets From Former Employer In Order to Start Competing Business

On April 24, 2013, a federal jury in the Northern District of California found former Korn/Ferry International corporate executive recruiter, David Nosal, guilty on six counts of conspiracy, stealing trade secrets, and violations of the Computer Fraud and Abuse Act (“CFAA”). An appeal is expected, however.… Continue Reading

California Appellate Court Upholds Stipulated Injunction Prohibiting Solicitation of Customers and Rejects After-The-Fact Effort to Show that Customer Nonsolicit Violated California’s Ban on Noncompetes

By Jennifer Redmond and Suzanna Winslow Wanke v. Superior Court of San Diego, Cal. Ct. of App., Fourth Dist., Div. One, Case Nos. D058825, D058669 (October 4, 2012) On October 4, 2012, the Fourth District Court of Appeal upheld a stipulated injunction which the trial court had concluded was an unlawful business restraint in violation of the law … Continue Reading

California Court Of Appeal Refuses To Enforce Non-Compete Against Selling Shareholder

The California Court of Appeal for the Fourth District recently refused to enforce a covenant not to compete against the former employee and selling shareholder of a video game company. In Fillpoint, LLC, v. Maas et al., Case No. G045057, 2012 Cal. App. LEXIS 914 (Cal. Ct. App. Aug. 24, 2012), the Court of Appeal … Continue Reading

Recent Virginia Supreme Court Decision Marks a Steady Shift in the Law Governing Noncompete Agreements

By Nick Schnermann On November 4, 2011, the Virginia Supreme Court issued a decision in Home Paramount Pest Control Cos. v. Shaffer, in which the Court found a covenant not to compete in an employment agreement to be overbroad and unenforceable. In so doing, the Court overruled its own 1989 decision in Paramount Pest Control … Continue Reading

Wax This! New York Court Finds Restrictive Covenant In Hair Removal Specialist’s Employment Agreement Unreasonable and Unenforceable

By Jonathan Sokolowski & Eric Raphan On August 19, 2011, in Eyes of the World v. Boci, No. CV 46549/09 (N.Y. Civ. Ct. Aug. 19, 2011), Judge Margaret A. Chan held that a former employee’s restrictive covenant prohibiting her from providing salon services to any client of her former employer for whom she provided such services … Continue Reading

California Court Of Appeal Doubts Viability Of “Trade Secrets” Exception For Covenants Not To Compete

In Pacesetter, Inc. v. Biosense Webster, Inc., the California Court of Appeal for the Second Appellate District found that a non-competition clause contained in Biosense Webster, Inc.’s (“Biosense”) Employee Secrecy, Non-Competition and Non-Solicitation Agreements (“Agreements”) was void as a matter of law under Section 16600 of the California Business and Professions Code (“Code”)(California’s prohibition against … Continue Reading

California Court of Appeal Rejects Anti-SLAPP Motion in Trade Secrets/B&P Section 16600 Case

In World Financial Group, Inc. v. HBW Insurance & Financial Services, Inc. the California Court of Appeal for the Second Appellate District rejected an Anti-SLAPP motion to strike in a breach of contract, theft of trade secrets, and unfair competition case. The defendants moved to strike the complaint under California’s Anti-SLAPP statute, claiming that their … Continue Reading

California Supreme Court Disapproves “Narrow Restraint” Exception For Covenants Not To Compete; Holds General Waivers Should Not Be Interpreted To Waive Non-Waivable Rights

In Edwards v. Arthur Andersen LLP, the California Supreme Court reaffirmed California’s strong public policy against covenants not to compete.  The primary issue in the case was whether the Ninth Circuit’s "narrow restraint" exception was a proper interpretation of California law.  Under the narrow restraint exception, employers could enforce non-competition agreements that did not "entirely … Continue Reading

California Court of Appeal Decision Will Likely Lead To Confusion In The Future Regarding The Standard for the Enforceability Of Covenants Not To Solicit Employees and Customers

It is well established that covenants not to compete are generally unenforceable in California. The Fourth District Court of Appeal’s opinion issued on Monday in Strategix, Ltd. v. Infocrossing West, Inc., however, involves one of the few exceptions making non-competes enforceable (wherein the provision is entered into as part of the sale of a business), and … Continue Reading

California Court of Appeal Confirms That Non-Compete Agreements Have No Place In California Employment Contracts

The Second District Court of Appeal in Los Angeles issued a significant opinion last week, finding that non-compete agreements in California employment contracts are impermissible. In Edwards v. Arthur Andersen LLP, the Second District explicitly rejected decades of prior decisions –  many of them in federal courts – which had found such agreements to be permissible … Continue Reading

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